In which country must you file a tax return?
Private individuals and entrepreneurs for income tax purposes
If you live in the Netherlands, you have resident taxpayer status. If you live abroad and have income in or from the Netherlands on which the Netherlands is allowed to levy tax, you have non-resident taxpayer status. In both cases, you are subject to Dutch income tax and you usually have to file an income tax return in the Netherlands every year. If you have non-resident taxpayer status, you may opt to pay income tax according to the same tax rules as resident taxpayers. If you do not do this, you can file a digital tax return via the tax return program for non-resident taxpayers or use the C form.
Has the Netherlands concluded a tax treaty with the country you live in? In that case, it could be that we are not allowed to levy tax on certain income.
National insurance schemes
If you are covered by national insurance in the Netherlands, for example because you work in the Netherlands, you must also pay national insurance contributions. The national insurance schemes for which you pay contributions, are:
- Old Age Pensions Act (AOW)
- Surviving Dependants Act (Anw)
- Exceptional Medical Expenses Act (AWBZ)
Together with the income tax, we levy the national insurance contributions in a single amount.
If you are a non-resident taxpayer, this does not mean that you have to pay national insurance contributions on your income in the Netherlands as well. Other (international) regulations apply to this.
Opting for resident taxpayer status
Do you live abroad? Do you have income in or from the Netherlands on which the Netherlands is allowed to levy tax? In that case, you have non-resident taxpayer status.
This means that you must file a tax return in the Netherlands for this income and that you have to pay tax on this in the Netherlands. You may opt to pay income tax according to the same tax rules as resident taxpayers. In that case, you must meet the following conditions:
- You live in an EU country, or in another country with which the Netherlands has concluded a tax treaty. This treaty includes data exchange.
- You do not live in Switzerland.
Consequences of opting for resident taxpayer status
If you opt for resident taxpayer status, the same tax rules apply to you as to Dutch residents. In your tax return, you do not only state your Dutch income, but your total worldwide income. By opting for this, you may use:
- tax credits
- deductible items
If you opt for resident taxpayer status, you state your full worldwide income in your tax return. Your worldwide income includes your Dutch and your non-Dutch income (for example, foreign income from work or foreign capital). You also continue to be liable for tax in your country of residence, but due to the double tax relief, you pay tax on your income once.
If you have non-resident taxpayer status
If you live abroad and have income from the Netherlands, you must file a tax return in most cases. You can:
- file a digital tax return via the tax return program for non-resident taxpayers
- use the C form